It would take the administrator a couple of minutes to meet the problem of Ford's Ypsilanti plant, cited as an insurmountable obstacle by Dr. Lubin. The same sort of procedure could be adopted in the cases of the majority of plants which are being converted from civilian to defense production and where questions as to the definition of "new labor" might arise. As a matter of fact many of these conversion programs have to be worked out under the guidance of the Government anyway so perhaps there would be no added administrative problem. That would also hold true of subcontracting. The example Dr. Lubin cites shows that the Government already is dealing with these problems. If it has been found necessary to grant producers a 15-percent premium to cover learning costs for the employer, of course, that provision would be taken over by the administrator. The problem would arise under any form of price control; in fact, it has come up without price control. 12. That an employer would find it difficult to establish a wage scale for a product new to him if it is not already being manufactured in his State. A little change in the wording of the bill wili take care of that. I appreciate the suggestion. 13. That there are wide spreads in wage rates between establishments engaged in the same type of production in different parts of the country and that equalization of these wages would boost labor costs tremendously. This thought apparently is a hang-over from the misunderstanding regarding point 9 that the wage ceiling aims at equalizing all wages on a national basis. As has already been explained, the ceiling is based on a preservation of prevailing wages in every establishment and every county for the emergency. The so-called equalizing forces that would be at work under the wage ceiling would be these: (a) There would be a tendency for the very lowest-paid workers to get salary increases as, if their wages fall below minimum wage standards, they are not affected by the ceiling. These increases are not decreed administratively and present no administrative problem. I am sure no one questions their justice. (b) Collective bargaining would continue as normal. Dr. Lubin apparently considers this a force making for the equalization of wages and I do not object to the interpretation. Would there be less collective bargaining under Dr. Lubin's scheme of price control? If not, there should not be any less equalization of wages resulting from the process. The over-all ceiling would have this great advantage. it would put the Government where it could see that the increased share that goes to labor comes out of profits and is not passed on to the consumer in unjustifiably higher prices making for inflation. (c) The policy of tieing wages and living costs together and making the necessary adjustments would tend to equalize wages somewhat. I am sure no one would object to the justice of this attempt to distribute the burdens of defense proportionately. It is difficult to see what Dr. Lubin is driving at in this point about the upward equalization of wages. Does he fear that some wages actually may rise under the ceiling plan? If he does, that is a strange attitude for an official of the Department of Labor to take. I have emphasized repeatedly the ceiling plan is not directed at increases in wages as such. It seeks only to prevent unjustifiable increases and. anything that may lead to an inflationary spiral. Dr. Lubin's letter raises a serious question whether he understands the wage ceiling plan. He repeatedly refers to a "freezing of wages" when nothing of the sort is contemplated; he argues that "we should not throw away the entire machinery that has been established for the settling of wages" when the ceiling would lean heavily on that machinery and encourage its strengthening. He argues that "the job can be well done only if it is decentralized," which is very true. But does Dr. Lubin believe that any job of price control can be well done if it is not decentralized? He seems to have forgotten that the chief advocate of the over-all ceiling, Bernard M. Baruch, who was chairman of the War Industries Board in the last war, has been the foremost exponent of decentralization in our defense mobilization. In the last war, the War Industries Board had regional committees in every industrial area to coordinate defense efforts. These committees maintained a constant inventory on the use of all machine tools and plants in their areas; they were constantly searching out idle or civilian facilities that could be converted to war production; they helped in subcontracting, in arranging for the community pooling of resources. If one plant was jammed with orders the committee shifted the work to a nearby plant which was not operating at peak; the committees helped anticipate local shortages, they reduced demands on electric power, they aided in curtailing the less essential factories and in shifting them to war use. Only now are we beginning to get regional organization of our defense effort. Mr. Baruch did a good deal of price fixing in the last war-without the benefit of a huge bureaucracy. The total personnel used to fix prices in the last war could meet in any ordinary-sized room. The The War Industries Board had committees of industry in each industry. Government set the price and gave it to these committees. In that way competitors were set to watching one another. To meet local needs, the War Industries Board had local defense councils extending into every community. Mr. Baruch has urged a similar set-up to police prices today-to have a man's competitors and a man's neighbors bear the brunt of the policing work. Only lately have these councils of national defense and committees of industry begun to be established and, then, not in a way that they are likely to be used to enforce price controls. When Dr. Lubin declares that wages will never be stabilized if profits are expanded unreasonably, I must remind him that my bill also imposes a ceiling on profits over 8 percent. Also that these profits will be cut some more if a bonus plan for having labor share in the fruits of reduced labor costs is adopted. When Dr. Lubin urges us to wait before coming to grips with the problem of controlling wages, let me ask Dr. Lubin if last winter he did not advise against doing anything to control prices? Did he not advise that no abnormal rise in prices was reflected in his statistics, and that action should be held up? Only a few weeks later, prices began to boil and they have continued boiling since. Dr. Lubin's advice proved pretty costly. If we don't watch out, inflation will overwhelm us while Dr. Lubin's statistics are being mimeographed. To sum up, I do not think I do Dr. Lubin an injustice to say that he has not tried to think through how this wage ceiling might work. He has set his mind against it. In searching for arguments to support his position, he has magnified little problems into what he seems to think are impossible obstacles when, as I have shown, all these problems can be solved fairly easily with wise and sympathetic administration. Almost it seems that he fails to appreciate the gravity of our situation. Reading his letter one would never get the impression that it concerns perhaps the most important single piece of legislation that has come before this Congress, and which may determine whether we are to win and survive the war. One would think we were debating a highway bill and not how to save our democracy from the terrible consequences of inflation and all that it brings in its wake. I do not like to say so, but this letter seems to be written in a spirit of defeatism. It reads as if Dr. Lubin does not believe that a democracy can check inflation. He does not seem to have enough faith in the American workingman to believe that labor will consent to a fair and equitable formula by which wages and living costs move together. He does not seem to have the confidence in the American people to believe that they will support a law which treats all persons alike, without prejudice or favor. Dr. Lubin has abandoned the battle of inflation without firing a shot. Like some generals we have had, his energies seem concentrated on think ing up excuses why not to fight. I refuse to subscribe to any belief that a democracy cannot meet its problems striaghtforwardly, honestly, and effectively. I think the American people will do anything that is asked of them to beat Hitler as long as all persons are asked to contribute alike. The American people are not looking to their leaders for excuses as to why things are difficult to do; they expect to be told how the things that must be done, can be done. Democracy is not impotent. Very truly yours, ALBERT GORE, Member of Congress. CONGRESS OF THE UNITED STATES, Congressman H. B. STEAGALL, HOUSE OF REPRESENTATIVES, Washington, D. C., October 27, 1941. Chairman, Banking and Currency Committee, House of Representatives, Washington, D. C. DEAR CONGRESSMAN STEAGALL: In support of my statement that corporation executive salaries were being raised precipitantly, I submit for the printed hearings of the committee certain statistics taken from the record of the Securities and Exchange Commission. You will notice from these records that the remuneration of the highest paid executive in each of 21 corporations with fiscal years ending in June was increased by 18.1 percent. Attached is a table both summarizing and listing comparative salary data for 1940 and 1941 for 33 companies with fiscal years ending in April, May, and June. This information was filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, and represented virtually complete coverage of all companies having fiscal years ending in this period which are also registered under the Securities Exchange Act. Sincerely yours, 4 ALBERT GORE, Member of Congress. TABLE 99.-Remuneration of owcers (highest, second, third) and total for all officers and directors, as reported for fiscal years ended April, May, and June, 1940 and 1941 TABLE 99.-Remuneration of officers (highest, second, third) and total for all officers and directors, as reported for fiscal years ended April, May, and June, 1940 and 1941-Con. 1 Including director and employees. 14, 775 14, 775 103, 735 12 25,000 20,000 15,000 13 89, 942 12 25,000 20,000 15,000 13 110, 470 2 Paid to an officer whose employment terminated Dec. 2, 1940. 3 Not including $10,000 retainer fees and $3,955 in other legal fees; officer resigned effective June 10, 1940. 4 Officer resigned effective Sept. 18, 1940. Not including $9,000 retainer fees paid in 1940 to firm of which officer is a member. Not including $39,840 paid for legal services to copartnership of which one director was a member. 7 $5,580 and $1,000 paid for legal services to copartnership of which 1 director was a member. A director is a partner of firm which received $1,200 for legal fees. A director and officer is member of firm which received $3,000 as general counsel ($4,300 in 1940). 10 A director is partner of law firm which received $3,000 in legal fees. 11 President received bonus or shares of $30,000. 12 Trustee is partner of firm which received $10,000 for legal services. 13 Includes trustee's fees for attending meetings in part reimbursement for expenses. 64300-41-pt. 2-68 Congressman H. B. STEAGALL, CONGRESS OF THE UNITED STATES, Chairman, Banking and Currency Committee, House of Representatives, Washington, D. C. DEAR CONGRESSMAN STEAGALL: In support of my statement that salaries of corporation executives were being raised precipitantly, I submit for the printed hearings of the committee a table showing comparative figures of the remuneration received by executives of steel companies for 1939 and 1940. This table is taken from the pamphlet, Survey of American Listed Corporations, Reported Information on Selected Defense Industries-Steel and is based on data collected on Work Projects Administration projects sponsored by the Securities and Exchange Commission. Sincerely yours, ALBERT GORE, Member of Congress. TABLE 100.-Remuneration data: Steel-Assets over $100,000,000 each 1 Officers received no remuneration; directors received directors fees only. Excludes value of options exercised for 1,220 shares in 1939, and 2,215 shares in 1940, of common stock by various officers, directors, and employees, of whom only one is designated. Also excluded are payments by the registrant for annuities under the registrants group annuity plan. Excludes $50,000, $37,000, $25,000, and $149,500, expended by registrant in the purchase of annuities for highest, second highest, third highest, and all officers and directors, respectively. Includes amounts received as pensions from United States Steel and Carnegie pension funds. Excludes value of options exercised by highest, second highest, third highest, and all officers and direc tors for 375 shares, 228 shares, 240 shares, and 1,388 shares of common stock, repectively. Excludes value of options exercised by highest, third highest, and all officers and directors for 375 shares 240 shares, and 1,388 shares of common stock, respectively. |